§ 25. Mr. Ridleyasked the Postmaster-General what is the limit of loss which he proposes to allow the Giro to incur.
§ Mr. StonehouseThe loss on Giro now being incurred was anticipated and expected in the launching of this new service.
§ Mr. RidleyWill the Postmaster-General say what it is? Is he aware that he is fooling about with public money? Will he say how much he has wasted and stop the Giro system when it gets too much into the red?
§ Mr. StonehouseThe House knows that the hon. Gentleman is opposed to the Giro. He knows the loss that has been incurred. It is £1.7 million in the last financial year, and a loss of £4 million is expected for the current financial year. [HON. MEMBERS: "Oh".] These amounts were anticipated, and are to be anticipated in the launching of a completely new cash transfer system. Certainly other private organisations like Barclaycard would expect to incur such substantial deficits in the first years when such a system is being produced.
§ Mr. HefferIs my right hon. Friend aware that most people believe this to be a basically good scheme, but would he not agree that there is a need to look into the matter of allowing a certain amount of credit for overdraft at the end of each month, since this is a genuine problem which prevents many people from using Giro at present?
§ Mr. StonehouseNo, Sir. It is a cash transfer system, and it would be wrong for Giro to enter into overdraft facilities. It would make it an extremely complex system and would be subject to fraud.
§ Mr. Stratton MillsWhen will the service make a profit?
§ Mr. StonehouseWe are expecting to reach the break-even point in 1972.
§ 34. Mr. Hooleyasked the Postmaster-General if he will simplify the mode of opening a Giro account so that this can be swiftly and easily done across any post office counter.
§ Mr. StonehouseIt is very simple to open a Giro account already, but under new arrangements which I am introducing from 7th July a person will be able to send his initial deposit with his application form by post to the Giro centre.
§ Mr. HooleyIs my right hon. Friend aware that, although I welcome the system, having filled up my original form, I have now received altogether eight pieces of paper, a handbook containing 103 paragraphs of explanations, including one about what will happen if I drop dead, and a demand for 8s. 6d. for an even further batch of stationery?
§ Mr. StonehouseI am glad my hon. Friend has discovered that the Giro centre sends out full information about Giro accounts. It is important that those who subscribe to it should fully understand the contractual provisions, but we are simplifying the application form to maximise the number of applications. I believe that the new system being introduced will have that effect.